Recently, a growing amount of data suggests that there is an intricate relationship between sovereign debt and civil unrest. This article proposes that the powers of the UN Security Council, and in particular its experience with the imposition of sanctions, should be used in order to restructure sovereign debt before a situation aggravates and leads to the outbreak of civil unrest or an armed conflict. The proposal entails some intricate legal questions. First, it requires a reconsideration of Article 39 of the UN Charter, the threshold for the power of the Security Council to adopt binding resolutions. Second, conflicts of competence might arise between the Security Council and the International Monetary Fund (IMF). Third, the rights of the holders of sovereign bonds need to be respected.
Wednesday, November 9, 2011
Goldmann: Sovereign Debt Crises as Triggers of Armed Conflict: Restructuring Under Chapter VII of the UN Charter?
Matthias Goldmann (Max Planck Institute for Comparative Public Law and International Law) has posted Sovereign Debt Crises as Triggers of Armed Conflict: Restructuring Under Chapter VII of the UN Charter? (Goettingen Journal of International Law, forthcoming). Here's the abstract: